ENERGY TECHNOLOGY FACT SHEET

Photovoltaics (PV)
Solar Electricity
Semiconductors that convert solar energy directly into
electricity are called photovoltaic (PV) devices or solar
cells. Although there are about 30 different types of PV
devices under development, there are three main tech-
nologies in commercial production – monocrystalline
cells, polycrystalline cells and thin-film cells.

The Technology
Monocrystalline – or single crystal – solar cells are
manufactured from a wafer of high-quality silicon and Example of a PV grid-connected system. (Photo courtesy NREL.).
are generally the most efficient of the three technologies
at converting solar energy into electricity.
Costs
Polycrystalline solar cells are cut from a block of lower- Capital cost PV module: $2600 - 5000/kW
quality multi-crystalline silicon and are less efficient but Capital cost PV system (3 kW) $4700 - 7000/kW
less expensive to produce. Operating Life: 30 years

Thin-film solar cells are manufactured in a very different Typical Cost Breakdown
process that is similar to tinting glass. These solar cells 100%
PV Cell
are made of semiconductor material deposited as a thin- 80%
PV Module
film on a substrate such as glass or aluminum. Thin-film 60%
BOS
solar cells are generally less than half as efficient as the 40%
best cells, but much less expensive to produce. They are Design/Install
20%
widely used for powering consumer devices. 0%
Struct./Land

300W Off- 3kW On-

Solar cells are encapsulated into modules, several of
which are combined into an array. There is, however, a
growing market of “building-integrated” PV devices that
are manufactured as part of conventional building mate-
rials such as roof tiles or glass paneling.
A PV array is usually part of a system that may also in-
clude energy storage devices (usually batteries), support
frames and electronic controllers; these are collectively
referred to as the balance-of-system or BOS.
The amount of power from a PV array is directly propor-
tional to the intensity of the light hitting the array. Photo-
voltaic arrays produce direct-current (DC) electricity but
can be configured to produce any required combination
of voltage and current – including conventional residen-
tial alternating current (AC) voltages.
There are currently about 400,000-800,000 photovoltaic
systems operating worldwide in applications ranging
from individual consumer products and small-scale
stand-alone units for rural use (for example, solar home
systems) to grid-connected roof-top systems and large
UNEP Division of Technology, Industry and Economics • Energy and OzonAction Unit
www.uneptie.org/energy
Grid Grid
Key Points:
• PV is most competitive in remote sites, far from
the electric grid and when relatively small
amounts of power are required, typically less than
10 kW.
• PV is a modular technology that can be used in
most parts of the world and integrated with diesel,
wind, and hydro systems;
• PV systems have high capital and low-operating
costs.
• Few environmental risks are relevant to PV -
planning approval and environmental assessment
are usually not necessary.
• PV technology and systems continue to evolve
rapidly.

central-grid power stations. In the period 1995-2000,
more than 20,000 solar pumps were installed globally.
Typical system size varies from 50 watt (W) to 1 kilowatt
(kW) for stand-alone systems with battery storage and
small water pumping systems; from 500 W to 5 kW for
roof-top grid connected systems and larger water pump-
ing systems; and from 10 kW to megawatts for grid-
connected ground-based systems and larger building-
integrated systems.
Photovoltaic devices are solid state devices with no
moving parts and a demonstrated record of reliability. PV
modules may operate for 30 years and are usually sold
with 10-20 year manufacturer warranties. Although PV
modules themselves require little maintenance, other
BOS components, particularly storage batteries, generally
require maintenance.
To accurately assess the value of electricity from a PV
system it is necessary to compare the cost of the PV sys-
tem to the minimum cost of providing the same energy
service by an equivalent alterna-
tive.
This is particularly relevant for
stand-alone systems in remote
areas where the temptation is to
simply compare the capital costs
between PV and other energy
supply options. A more accurate
approach is a life-cycle cost
analysis that includes fuel, main-
tenance, depreciation, interest and
other expenses. PV systems gen-
erally have a high capital cost, but
a low running cost, as the “fuel” is sunlight.
For rural villages in developing countries, PV technology
offers an immediate, direct and safe alternative to kero-
sene lamps and diesel generators. In such countries a so-
lar home system to power lights and small appliances can
be purchased for as little as $350 and may be much
cheaper than a grid extension or diesel generator.
UNEP Division of Technology, Industry and Economics • Energy and OzonAction Unit
www.uneptie.org/energy
Project Risks
Technology: Some BOS components, such as
power electronics, are relatively new and may be
prone to higher failure rates. System design, more
than the individual components, is critical to tech-
nology risk management.
Environmental: Most commercial photovoltaic
materials pose no threat to humans or the envi-
ronment, but components such as batteries do
contain hazardous materials. Small PV system
projects do not generally require environmental
impact assessments as the systems are usually
fixed to existing structures. From a government
policy perspective, however, recycling or disposal
of system components, such as batteries, are im-
portant in the design of larger PV programmes.
Planning: Off-grid PV systems need minimal
planning approvals. Grid-connected systems re-
quire grid access permits. These permits are usu-
ally standardized with fixed tariffs, and therefore
project development risk is usually also low for
these systems. PV systems can also be vulnerable
to theft and vandalism.
The Industry and Market Trends
The PV market grew by an average of 15 percent annu-
ally from 1990-2000. In 2000, approximately 200 MW
of PV modules were sold for a total revenue exceeding
US$1.1 billion. The total installed capacity worldwide is
now about 1,200 MW, with an average cost of approxi-
mately US$4 per watt. Costs have fallen by 20 percent
for each doubling of cumulative sales.
At least 30 firms worldwide fab-
ricate PV cells and many more
assemble these cells into mod-
ules. The top ten cell manufactur-
ers control more than 79% of
world shipments. Increasing mass
production of PV technology
continues to reduce costs in line
with the classic “learning curve”
for new technologies. Since
1975, PV costs have been re-
duced by 20 percent for each
doubling of cumulative sales.
There is general consensus that thin-film technologies
offer the best long-term prospects for very low produc-
tion cost, but crystalline technology still has large poten-
tial for cost reduction through economies-of-scale and
technological improvements. Research and development
is aimed at improving both the cell and module efficien-
cies and reducing the cost for BOS components, which
currently make up half the cost of the system.